In today's world, companies with an agile IT landscape are better prepared for the inevitable changes of digital transformation. To keep up with the accelerating pace of business development, companies have accumulated thousands of applications in their portfolios due to various factors, such as strategic mergers and acquisitions, organizational changes, hardware upgrades and the introduction of the latest technology. As a result, their IT environments have become incredibly inflexible, complex and maintenance-intensive. The environment also creates silos of redundant information that negatively impacts business performance.
When it comes to keeping up with the latest innovative trends, delivering world-class customer service, cutting costs, and scaling globally, businesses benefit from a rationalized application landscape.
Our White Paper tells you on how Application Rationalization contributes to the bottom-line and the Norma Success Story shows you how that has been executed by one of our customers.
In the following, we will guide you through six points that should serve as a guide for Application Rationalization:
1. Scoping the Application Rationalization
2. Secure completeness of Application Inventory
3. Evaluate your Applications
4. Define Target Application Portfolio
5. Set Up Implementation Roadmap
6. Ongoing Application Portfolio Maintenance
Foundation for Application Rationalization are maintained Applications in LeanIX. To find information about importing your Data into LeanIX, read our Application Portfolio Management section.
With the Application Matrix, you get a general overview of your Application Portfolio sorted by Business Capabilities and User Groups. A major part of a focused Application Rationalization is a proper scoping and step-by-step enhancement of your application portfolio. The scoping can be functionally or based on your organization.
You can adapt the axis by using the Configure function on the top right of the report. The Drill-Down will similarly give you the option to show Fact Sheets of other IT categories that are related to the Applications (e.g. IT-Components)
With Functional Scoping you filter those Business Capabilities you want to concentrate on and rationalize applications within them step by step. For example, you just want to focus on the Applications that are connected to Customer Relationship via different branches to reduce redundancies of close white-spots within your portfolio.
White-spot: For the "Customer Service" Capability there is an application in place for one region only. The bad functional fit indicates that this is not a feasible solution for a worldwide rollout. The Whitespots should be filled with a new application.
Redundancy: For the capability "Retention & Loyalty Programs" are different applications in per region in place. The functional fit heatmap indicates that two of the applications are candidates for rationalization.
Another option is the Regional Scoping. Here you filter and focus on User Groups. For example, you want to rationalize all Applications that are used by User Groups located in Europe.
Redundancy: We observe a high amount of applications in the User Group "France" for the same capabilities. This hints at redundancy of Applications and according rationalization potential. Functional Fit can be used as one criteria to assess your desired target application.
White-spot: For the User Group "Italy" are not many Applications in place. It is possible that the organization has some white spots in their application landscape.
In larger corporations, typically both approaches would be combined and rationalization via different locations would come in different phases.
Especially within Post Merger Integrations, IT is faced with challenges to integrate IT-Landscapes and reduce redundancies and realize post-merger synergies. To learn more about this special use case, please have a look at our whitepaper Realizing Post-Merger Synergies in Your IT Application Landscape.
The process of rationalizing your applications starts with gathering important information about the current inventory and all the applications in the selected area. You want to make sure your landscape is complete and gain a first insight into the application and its relevance to the business.
The typical process is as follows: Compile the available documentation (e.g. from Excel, SharePoint, Visio) in LeanIX. This step forms the basis of the inventory. LeanIX enables automated integration with other helpful tools, such as CMBDs, business process modeling tools, and ERPs to present the baseline.
It can be hard work to get a complete and actionable overview of your Applications. LeanIX offers you a hand full of options to check for completeness, decision-relevant attributes (e.g. Business Criticality, Functional Fit, Technical Fit) and ways to collect them in an efficient way (e.g. using surveys). Nonetheless, it is always helpful to get in personal touch with your stakeholders and talk about sensitive topics like rationalization in workshops or dedicated interviews.
To validate completeness our recommended views to go into workshops and interviews are the Application Landscape or the according Table-View.
- Application Landscape (Landscape View)
- Application Landscape (Table View)
By default, LeanIX captures the Business Criticality, Functional Fit and Technical Suitability of each application. This information provides sufficient input and orientation for initial evaluation. The reported values may either be determined by a competent authority or calculated based on more detailed input.
- Business Criticality: In your judgment, identify the appropriate service level and disaster recovery requirements.
- Functional Fit: In your judgment, how well does this Application meet the business requirements today and in the near future (next 2 years).
- Technical suitability: In your judgment, is there any need to replace services, software or hardware with respect to the business requirements today and in the near future (next 2 years).
For each category we recommend the following definitions:
- Mission Critical: Breaks in service are intolerable and immediately significantly damaging. Availability required at almost any price.
- Business Critical: A business-critical service requires continuous availability, short breaks in service are not catastrophic.
- Business Operational: Contributing to efficient business operation but out of direct line of service to customer.
- Administrative Service: Failures are undesirable but do not affect customers and can be tolerated a little more.
- Perfect: High number of functions available.
- Appropriate: All major functions available.
- Insufficient: Rudimentary functional support available.
- Unreasonable: Not enough or wrong functionality available.
- Fully Appropriate: No change needed apart from regular maintenance.
- Adequate: Some parts could be optimized.
- Unreasonable: Replacement recommended to satisfy the business requirements.
- Inappropriate: Replacement mandatory to satisfy the business requirements.
If you already subscribed responsible persons to Applications you can send out surveys to collect the data to evaluate your applications. This collaborative approach is a great LeanIX feature to include people to work with LeanIX and share the efforts of getting actionable data. Please have a look at our Survey Add-On to get in-depth information on using this function.
The screenshot below shows a typical survey to collect data for a Application Rationalization measure.
Our powerfeature-Survey enables you to add/edit data in the survey which is then automatically updated in the fact sheets.
After collecting all your decision-relevant data, LeanIX gives you the chance to use all these data in heat maps, as well as in a convenient table format (see screenshot below).
Filtering: As every other view in LeanIX also the tables can be narrowed down to your needs using the filters or smart-search.
Configuration: The columns shown in the table can be easily configured or saved so you see what you need to see and are not distracted by unnessary information.
At the end of the evaluation process, you will have collected enough relevant information to give strategic advice on rationalizing applications and recommend the appropriate measures for each application used. Recommendations should be based on your strategic approach to IT. What we see in many cases is the usage of the TIME-Model to define normative strategies for driving your application landscape towards the desired state.
- Keep the application and consider investing further in it, if usage stays high (e.g. high utility in good technical condition).
- Tolerate the application as it serves its purpose (e.g. a certain degree of utility in good technical condition) or because there is no adequate alternative.
- Modernize the application because it has a high business value (e.g. application with high usage, but supported by outdated technology).
- Discard the application, migrate the data and users on an existing Application (e.g. redundant applications).
- Unify multiple applications to a common version/technology platform.
- Merge applications (either physical, logical or both).
- Replace the application with a standard commercial solution.
- Eliminate useless Applications (possible reasons: no business value, not used, low utility, based on obsolete software).
LeanIX supports you in adapting the TIME-Model using Tags. You will then be able to look at your Application Landscape and see the different categories of applications in a heatmap view.
Implementation of rationalization programs is likely to be carried out in several waves. One approach is to structure your rationalization in short-term, medium-term and long-term measures. The short-term measures focus on the elimination of unused applications. The medium-term measures include migrations and consolidations, e.g. to bring all local applications to the same version or technology. The long-term measures involve major migration projects, extensive restructuring, and major technological upgrades.
If you want to know about best practice how to strategically set-up the scoping and waves of your Application Rationalization feel free to contact your Customer Success Manager.
Now that the application portfolio has been evaluated and so optimization could start, it is important to maintain the landscape on an ongoing basis. One-off efforts to rationalize applications, while providing initial savings to the business, do not provide the long-term benefits of ongoing rationalization of applications. Application rationalization improves the overall efficiency of IT and ensures that the IT landscape is actively aligned with business goals.
To secure Data Quality read our Increase your Data Quality section.
While LeanIX supports you to control the data in the tool, you should also make sure that EA finds a fixed seat on the table for strategic discussions about the development of your landscape and is part of every IT project.